Lyla Lindsey
The Australian dollar (AUD) is the official currency of Australia and several independent countries and territories in the South Pacific. It was introduced in 1966 to replace the Australian pound. The Australian dollar is also known as a commodity currency due to the nation's substantial raw material exports. In 1988, Australia became the first country to produce polymer banknotes, which are made of polypropylene polymer. The AUD is the sixth most-traded currency in the foreign exchange market, with a relatively high-interest rate.
| Characteristics | Values |
|---|---|
| Date of introduction | 14 February 1966 |
| Replaced | Australian pound |
| Conversion rate | £A1 = A$2 |
| Subdivisions | 100 cents |
| Symbol | $ |
| Countries and territories that use it | Australia, Christmas Island, Cocos (Keeling) Islands, Norfolk Island, Ashmore and Cartier Islands, Australian Antarctic Territory, Coral Sea Islands, Heard Island, McDonald Islands, Kiribati, Nauru, Tuvalu, Papua New Guinea (until 1975), Solomon Islands (until 1977) |
| Exchange rate (in 2025) | 1 AUD = USD 0.65 |
| Total broad money at the end of 2024 | AUD 3.468 trillion |
| Cash in circulation in 2020 | A$94 billion |
| Denominations | 5, 10, 20, 50, and 100 AUD |
| Coins | 1 AUD, 2 AUD, 5, 10, 20, and 50 cents |
| First polymer notes | Issued in 1988 |
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What You'll Learn
The Australian dollar was introduced in 1966
The Australian dollar was introduced on 14 February 1966, replacing the Australian pound at a conversion rate of two dollars to the pound. It was established as a decimal currency, meaning British pounds, shillings, and pence were replaced by dollars and cents. The $ symbol was intended to have two strokes, but a version with one stroke was also accepted.
The first paper notes of the Australian dollar were published in 1966 in denominations of $1, $2, $10, and $20. The $5 note was circulated the following year, in 1967, and the first coins introduced included 1 cent, 2 cents, 5 cents, 10 cents, 20 cents, and 50 cents. In 1967, Australia abandoned the sterling standard and pegged the Australian dollar to the US dollar at the rate of 1 AUD = 1.12 USD.
The Australian dollar is the official currency and legal tender of Australia, including all of its external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. It is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, Ashmore and Cartier Islands, Australian Antarctic Territory, Coral Sea Islands, Heard Island, and McDonald Islands.
The Australian dollar is often referred to as a commodity currency due to the nation's substantial raw material exports, and its value is often affected by other large import markets in Asia, such as China and India. In 2020, the Reserve Bank of Australia increased the cash in circulation from A$83 billion to A$94 billion due to increased demand for notes.
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It is used in 6 countries
The Australian dollar (AUD) is the official currency of Australia and several independent countries and territories in the South Pacific. It is used in six countries, including Australia and its external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. In addition, the Australian dollar was the legal tender of Papua New Guinea until 1975 and the Solomon Islands until 1977.
The Australian dollar was introduced in 1966, replacing the Australian pound. It is subdivided into 100 cents, with the $ symbol preceding the amount. The currency has a relatively high-interest rate, making it popular for "carry trades" with the Japanese Yen.
The Reserve Bank of Australia issues the Australian dollar, and the country was the first to produce and use polymer banknotes in 1988. These notes are made of polypropylene polymer, which are more durable, recyclable, and secure against counterfeiting. The polymer notes are now supplied to a growing number of other countries, including Bangladesh, Brunei, Chile, Kuwait, Malaysia, Mexico, Nepal, New Zealand, Papua New Guinea, Romania, Samoa, Singapore, Sri Lanka, and Vietnam.
The value of the Australian dollar is influenced by the country's exports of natural resources and commodities such as iron ore and coal. It is often referred to as a "'commodity currency'" due to Australia's substantial raw material exports, and its exchange rate is tied to demand from Asian countries, especially China and India.
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Australia prints polymer notes for other countries
The Australian dollar is the official currency of Australia, its external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. It was introduced in 1966 to replace the Australian pound. The $1 and $2 banknotes were replaced by coins in 1984 and 1988, respectively.
Note Printing Australia (NPA), a wholly-owned subsidiary of the Reserve Bank of Australia (RBA), has been printing banknotes for Australia since 1913. In 1988, NPA introduced the world's first polymer banknote, made of polypropylene polymer, which was a significant disruption to the 300-year-old paper banknote industry. This innovation was driven by the need to combat counterfeiting, improve durability, and enhance security.
NPA's expertise and RBA's patronage played a pivotal role in the global adoption of polymer banknote technology. NPA has printed over 10 billion banknotes for 19 countries across more than 80 denominations. They have supplied polymer notes or the polymer substrate to countries like Bangladesh, Brunei, Chile, Kuwait, Malaysia, Mexico, Nepal, New Zealand, Papua New Guinea, Romania, Samoa, Singapore, Solomon Islands, Sri Lanka, and Vietnam.
The benefits of polymer notes, including durability, counterfeit resistance, and environmental friendliness, have been widely recognised. NPA has won awards for its printing capabilities and has actively promoted the advantages of polymer technology. The company has worked closely with Securency, a joint venture between the RBA and film suppliers, to market and supply secure polymer substrates globally.
The global impact of NPA's polymer notes is evident, with over 60 countries now using polymer currency, including influential adopters such as the Bank of Canada and the Bank of England. NPA's printing costs are also impressive, with a reported cost of only 34 cents per note in 2012. The company's success in the export market has led to long-term supply agreements with international customers.
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AUD is a commodity currency
The Australian dollar (AUD) is the official currency of Australia and several independent countries and territories in the South Pacific. These include Christmas Island, Cocos Islands, Norfolk Island, Nauru, Tuvalu, and Kiribati. It is also the legal tender of three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. The Australian dollar was introduced on February 14, 1966, to replace the non-decimal Australian pound, with a conversion rate of two dollars to the pound.
The AUD is often referred to as a "commodity currency" due to Australia's significant exports of raw materials and commodities such as precious metals, oil, natural gas, iron ore, and agricultural products. Commodity prices have a large influence on the terms of trade and Australia's economy due to their substantial share of the country's exports. For example, an increase in the price of iron ore typically leads to higher export prices and an increase in the demand for Australian dollars.
The exchange rate of the AUD against other currencies, such as the US dollar (USD), is influenced by the demand for Australia's exports and the country's import activities. When Australia's exports are in high demand, the value of the AUD tends to appreciate. Conversely, when Australians import goods and services, the supply of AUD in the foreign exchange market increases, leading to depreciation. Additionally, the purchasing power parity (PPP) theory suggests that exchange rates adjust over time to equalize the cost of goods and services between different economies, impacting the value of the AUD.
The Reserve Bank of Australia (RBA) plays a crucial role in managing the country's monetary policy and producing the AUD currency. The RBA has historically maintained higher interest rates compared to other industrialized nations, making the AUD attractive to carry traders. The Australian economy and the AUD are closely tied to China, its largest trading partner, so fluctuations in the Chinese economy can significantly impact the AUD's value. Furthermore, the AUD is often seen as a diversification tool due to its exposure to Asian economies.
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AUD is the official currency of Australia and its territories
The Australian dollar, also known as the dollar or the Aussie dollar, is the official currency of Australia and its territories, as well as three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. It was introduced in 1966 to replace the Australian pound, with a conversion rate of two dollars to the pound. The $ symbol precedes the amount, and the currency is subdivided into 100 cents.
The Australian dollar is also used in several other countries and territories, including Christmas Island, Cocos (Keeling) Islands, Norfolk Island, Ashmore and Cartier Islands, Australian Antarctic Territory, Coral Sea Islands, Heard Island, and McDonald Islands. In 1966, when the Australian dollar was introduced, the first coins included 1 cent, 2 cents, 5 cents, 10 cents, 20 cents, and 50 cents. The $1 banknote was replaced by a $1 coin in 1984, and the $2 banknote was replaced by a smaller $2 coin in 1988. All previous notes of the Australian dollar remain legal tender, even if they are no longer printed.
Australia was the first country to produce polymer banknotes, made of polypropylene polymer, which were introduced in 1988 to combat counterfeiting. These notes are cleaner, more durable, and easily recyclable. The polymer notes have been upgraded over time to include new security features, such as tactile elements like Braille dots. The Australian dollar is also notable for its relatively high-interest rate, making it popular for "carry trades" with the Japanese Yen.
The value of the Australian dollar is influenced by the country's exports of natural resources and commodities, such as iron ore and coal. It is considered a ""commodity currency" due to Australia's substantial raw material exports, and its exchange rate is tied to demand from Asian countries, particularly China and India. In 2019, the AUD was the fifth most exchanged currency globally, and it continues to be an important currency in the foreign exchange market.
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Frequently asked questions
Six countries use the Australian dollar as their official currency.
The Australian dollar is the official currency of Australia, Christmas Island, Cocos (Keeling) Islands, Norfolk Island, Ashmore and Cartier Islands, Australian Antarctic Territory, Coral Sea Islands, Heard Island, McDonald Islands, Kiribati, Nauru, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu.
The symbol for the Australian dollar is $, and it is also abbreviated as AUD, A$, or AU$.*.
The Australian dollar was introduced on February 14, 1966, replacing the non-decimal Australian pound.
